Economics Automobile Industry There is no industry more present in the world-wide community than the automobile industry. The automobile has changed the lives, culture, and economy of the people and nations that manufacture and demand them. Ever since the late 1800s when the first "modern" car was invented by Benz and Daimler in Germany, the industry has grown into a billion dollar industry affecting so many aspects of our lives. There are more than 400 million passenger cars alone on the roads today. During the early part of the twentieth century, the United States was home to more than 90 percent of the world's automotive industry, but has shrunk to about 20 percent in today's world. This drastic change has occurred by the booming economies in such nations as Japan, Germany, Canada, France, Italy, and other nations. The US auto industry "sales totaled $205 billion, or 3.3 percent of the total Gross Domestic Product." (Tardiff 394) By the end of 19th century, there were about 500 auto manufacturers, but that number dropped sharply to 23 by 1917, and today the Big Three dominate the market. Ford, General Motors, and Chrysler make up the Big Three which account for 23 percent of the world's motor vehicle production in 1997, with the Japanese industries coming in second, producing 21 percent. Germany produces 9 percent, Spain, France, South Korea, and Canada each produce 5 percent of the international market in 1997. In the US alone, the auto industry, which includes it's 500,000 car-related businesses, create 12 million jobs. The automobile is clearly an oligopoly, but each company's control of the market has gradually diminished because of rising foreign competition. The US has three main auto manufacturers, Japan has five major producers as does Germany. Each of these companies produce differentiated versions of the same product, have control over their products' prices, and rely heavily on non-price competition. Each company produces a new line of cars for each model annually. There are many different types of cars, like sedans, station wagons, Sport Utility Vehicles (SUV), two-doors, and four-doors, but by comparing models between two competing companies, you can see how great the similarities are. The auto industry can still thrive even though it's products are so similar because the demand for cars is immense and continuous. People rely on cars for so many things that life without one seems impossible, especially in the US which registered 141 million cars in 1988, whereas Japan, the second highest, only registered 30 million. The creation and production of a new car starts about three to four years before it is released to the public. The initial planning stage begins in the company's corporate headquarters with ideas for the car from product planners and company officials. Automotive designers draw prospective sketches of the new car, and once approved, model makers create small scale models of the car in fiberglass or clay, then forge life size models also in clay or fiberglass. Automotive engineers then develop each part of the car, and mock-up builders create those indigenous parts of the new car. Test drivers check over the entire system, analyzing how it runs, and then gives suggestions on improving the vehicle. Automotive engineers test all the new, specialized parts of the car, and after all the parts are tested, plant engineers plan how to best mass-produce the new car. Of all the people working in the automobile industry, most will be found in this next industry which is the assembly plant. In the United States, the majority of these assembly plants can be found in the Michigan, Great Lakes area, and it, on average, takes about ninety minutes on the assembly line for an entire car to be produced. When planning a new car model, the company tries to create what the consumer wants. This is very difficult because as stated earlier it take between three and four years to develop a car. When General Motors begins...

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...Introduction
The case on the global automobile industry demonstrated by lowering cost through innovative production without sacrificing quality is the defining characteristic in a successful company. I found this case interesting because it characterized a successful automobile producer as one that will cut cost in an innovative approach to deal with a market that is constantly changing. The innovation in producing automobiles started with Ford through mass production and continued all the way to today with companies promoting major suppliers to move closer to assembly plants to cut cost. Since the beginning of the automobile industry the company that was able to lower their cost was the company that would lead the way. However, giving up quality is not a viable option. Lower quality automobiles lead to the down turn in the American automobile market share. In my Porter’s 5 Forces analysis I will identify key competitive forces in the automobile industry.
Risk of Entry by Potential Competitors
The risk of entry by potential competitors in the automobile industry is weak because a substantial amount of capital is needed to begin an automobile company and to maintain it as well. Companies already in the automobile industry have an absolute cost advantage against potential new automobile producers. Toyota’s “lean production system” was an innovative process of producing vehicles in a cost effective...

...The Automobile Industry
The automobile industry is an extremely large and complex industry that is made up of many different businesses that all share a part in the manufacturing, sale, service and financing of automobiles. This industry makes up a large part of the United States economy as well as the world economy, and therefore is important to understand. To understand the automotiveindustry it is best to look at the industry, market, and competition that shapes it.
Industry
The automotiveindustry is a business sector that produces and sells automobiles to a number of different outlets. The categories of automobiles that the automotiveindustry produces are sedans, minivans, SUV’s, light trucks, and pick up trucks. The automotiveindustry is tied to many other industries. These industries produce products used in the automotiveindustry as well as products that are very similar to the ones that the automotiveindustry produces. Examples of similar industries include but are not limited to truck and bus manufacturing as well as the trailer and motor home manufacturing industry. Other similar industries include those that produce the pieces and...

...and about a seventh of sales from General Motors."Economic Crisis". Retrieved 2013-06-03.
Exemplary modern cars:
• 1966–present Toyota Corolla – a simple small Japanese saloon/sedan that has come to be the best-selling car of all time.
• 1970–present Range Rover – the first take on the combination of luxury and four-wheel drive utility, the original 'SUV'. Such was the popularity of the original Range Rover Classic that a new model was not brought out until 1994.[40]
• 1973–present Mercedes-Benz S-Class – electronic anti-lock braking system, supplemental restraint airbags, seat belt pretensioners, and electronic traction control systems all made their debut on the S-Class. These features would later become standard throughout the car industry.
• 1975–present BMW 3 Series – the 3 Series has been on Car and Driver magazine's annual Ten Best list 17 times, making it the longest running entry in the list.
• 1977–present Honda Accord saloon/sedan — this Japanese sedan became the most popular car in the United States in the 1990s, pushing the Ford Taurus aside, and setting the stage for today's upscale Asian sedans.
• 1981–1989 Dodge Aries and Plymouth Reliant — the "K-cars" that saved Chrysler as a major manufacturer. These models were some of the first successful American front-wheel drive, fuel-efficient compact cars.
• 1983–present Chrysler minivans – the two-box minivan design nearly pushed the station wagon out of the market, and presaged today's...

...External industry analysis
a. competitive rivalry
a. profitability of the industry
Ford profit margins by quarter
GM Profit margins by quarter (declared bankruptcy in 2009)
Tesla Profit margins by quarter
b. how relevant is price competition in the market
Competitive Rivalry. Highly competitive industries generally earn low returns because the cost of competition is high. The auto industry is considered to be an oligopoly, which helps to minimize the effects of price-based competition. The automakers understand that price-based competition does not necessarily lead to increases in the size of the marketplace; historically they have tried to avoid price-based competition, but more recently the competition has intensified - rebates, preferred financing and long-term warranties have helped to lure in customers, but they also put pressure on the profit margins for vehicle sales.
Read more: http://www.investopedia.com/features/industryhandbook/automobile.asp#ixzz2BNSDQ2RQ
c. how aware are firms of each other
b. The top-level personnel moves highlight the growing confrontation between Ford and GM, as automakers claw their way back from the lows of the financial crisis. More than ever, America's two top domestic automakers find themselves fighting each other in vital markets around the globe, from California to Calcutta. GM ranks number one in U.S. sales, with Ford behind it....

...IN GLOBAL AUTOMOTIVEINDUSTRY
ECONOMIC CONTRIBUTIONS
The automobile industry is America's largest manufacturing industry with total auto industry and related employment numbering 13.3 million, a new Center for Automotive Research study shows. The majority of those jobs are in supplier and related industries. About 6.6 million jobs are connected to automotive manufacturing and new vehicle sales. This generates more than $240 billion in annual private sector compensation. (Automakers Drive U.S. Economy on Many Different Levels, New Study Show, 2003)
The following is the findings of the study "Contribution of The AutomotiveIndustry to the U.S. Economy":
*The auto industry is responsible for more than 100,000 jobs in each of several industries, including dealerships, fabricated metals, auto parts, auto repair and maintenance, road construction, tire dealerships, fueling stations, and car washes.
*The auto industry is responsible for more than 50,000 jobs in each of several other related industries, including plastics and rubber, trucking, computers and electronics, petroleum and machinery and equipment.
*The auto industry is responsible for more than 25,000 jobs in each of several more related industries, including advertising, textiles, aluminum and...

...-American Automobile Industry-
As we move towards a globalized business world, new competitors have risen from developing nations. These nations now pose a threat to the many industries still stuck in their old ways. One industry in particular is the American auto industry that has seen a large fall in their earnings. Japan is one nation who has revolutionized the auto industry through Toyota. The world is growing and with this growth we see a need for energy and with it has come a high price at the pump. Ford Motor Co. and General Motors Corp. due to a lack of planning, inability to adjust to this energy crisis, and other problems have led to massive losses. With investors anxious for change, American auto industry in order to compete in the car industry has sought ways to cut their costs. Both Ford and GM have resolved to plant closed downs and massive layoffs.
To compete with foreign automakers GM announced in Nov. of 2005 that it would be cutting costs by eliminating 30,000 hourly jobs and close or scale down operations at about a dozen U.S. and Canadian locations in attempts to save in a bid to save $7 billion a year. Ford announced similar plans in Jan. 23rds 2006 press release. They planned to close 14 plants in North America and cut between 25,000 to 30,000 Jobs by 2012 as they try to stop losses and adjust to a significantly lower market share. Rival Toyota has...

...StratSim Team 1 - Firm A
Cynthia Bronson
Shanae Spencer
Peter Wilson
Part 1: Industry Analysis
The Automobile industry
The automotiveindustry designs, develops, manufactures, markets and sells motor vehicles, and is one of the world’s most important economic divisions by profits. This analysis focuses on the industry, specifically, manufacturers of automobiles. There are five competitors in the StratSim environment: Firm A, B, C, D, and E. Industry sales in the most recent year were 4.3 million units, with expected growth in the next year. Within this industry, there are seven-vehicle classes: Economy, Family, Luxury, Sports, Minivan, Truck, and Utility. There are two new classes with potential – if properly marketed. These classes are the Alternative Energy Vehicle (AVE) and Delivery Vehicle. The Geographic concentration is the North, South, East and West regions.
Firm A
Amazing Cars (Firm A) is the industry leader with sales of $20.5 billion, followed by Efficient Motors (Firm E) with sales at $20.1 billion. Firm A is not represented in the Luxury, Sports, Minivan, and Truck vehicle classes. However, Firm A has a huge advantage in the Economy Class, represented by the Alec vehicle, owning 63% of the market share.
Exhibit 1.1: Sales and Market Share for Firm A
Vehicle Class | Firm A Total Sales (000s Units) | Vehicle | Firm A...

...This essay proposes to investigate the effects of recession on the automobile industry in world specifically in United Kingdom, United States, India and Japan. This includes its effects on employment sector, advertisement sector, Research &amp; Development Sector, Banking Sector and other sectors related to this, the effect on overall economy and the related terminologies thereof. Also, the aim is to the study of effect of recession on downturn in automobileindustry due to changes in Trade Agreements between two countries regarding export and import policies of this industry.
‘The National Bureau of Economic Research formally defines a recession as three consecutive quarters of falling real gross domestic product (GDP).’ (Company., 2003). As such there is no perfect definition of recession but as per the past experiences and research the above definition has been brought into limelight. Some economist says that when there is fall in GDP of 2 quarters there arises a situation of recession. There are any times of recession and none of the recessions are alike. If we take recent situation of recession, It has been caused by a shock to the availability of credit, a huge growing up of debt which needs to be unwound and its growing across the entire world. The global economic crisis began somewhere in 2007 and grew up in 2008 shocked most of the countries. Recession which started from USA spread all over the world in few months....